Supply Chain Performance

What is the SKU code? Definition and uses in logistics

In the logistics field, efficient control of products and their distribution is fundamental to the success of any company. And to achieve this, it is essential to have a unique…

On March 31, 2023

In the logistics field, efficient control of products and their distribution is fundamental to the success of any company. And to achieve this, it is essential to have a unique and accurate identification system. This is where the SKU code comes into play. In this FM Logistic post, we’ll tell you all about it.

What is the SKU code and what is it for?

The SKU (Stock Keeping Unit) code is a unique alphanumeric identifier used in logistics to identify and differentiate products in a warehouse or distribution center. This code is used to keep precise control of products, know where they are located in the warehouse, how many are in stock and what their status is. The SKU is an essential concept for logistics solutions.

Importance of the SKU in logistics

The SKU code is essential for the proper functioning of any distribution center or warehouse, as it allows efficient and accurate management of the products handled. Thanks to the SKU code, it is possible to know at all times the exact location of each product, which facilitates the task of location and saves time and effort on the part of workers.

In addition, the SKU code is also a key tool for inventory control and data analysis. With the information gathered through SKU codes, it is possible to keep an accurate record of the quantity of products in stock, their condition, their rotation, among other important data. This allows companies to make informed and efficient inventory management decisions.

SKU code characteristics

SKU codes are unique identifiers used to distinguish products in a warehouse or distribution center. Here are some of their most relevant characteristics:

Uniqueness: Each product is assigned a unique SKU code, allowing for accurate and error-free identification.

Alphanumeric combination: SKU codes are usually composed of a combination of letters and numbers, allowing for greater flexibility in their design.

Feature identification: SKU codes can be used to identify specific product characteristics, such as color, size, flavor, etc.

Readability: SKU codes must be readable and easily recognizable by warehouse or distribution center workers.

Automation: SKU codes can be read and processed automatically by computer systems, allowing for faster and more efficient product management.

SKU Advantages

The use of SKU codes in logistics has a number of advantages that make their use essential in any distribution center or warehouse.

Traceability: SKU codes enable more accurate and reliable tracking of products, making it easier to locate them at any time.

Forecasting: the use of SKU codes also allows for more accurate forecasting of inventory needs, resulting in more efficient management and cost savings for the company.

Improved customer service: more accurate delivery times and greater transparency in order management can be offered.

To manage a warehouse

The use of SKU codes is essential for efficient warehouse management. To this end, it is important that a clear and consistent coding is established for each product, allowing it to be uniquely and accurately identified. In addition, it is necessary to have a warehouse management software that allows the allocation and tracking of SKU codes, as well as inventory management and demand forecasting. This software must also allow integration with other management systems, such as the ordering system and the transportation system, to ensure a comprehensive and efficient management of the supply chain.

Marketplaces

In the case of marketplaces, the use of SKUs offers advantages in terms of inventory management and order processing. In addition, it helps sellers to more efficiently manage their product listings in the marketplace and on their own e-commerce website by allowing them to easily synchronize product information between the two. This saves time and effort for sellers, as they can manage all their products and stock from a single platform.

Ecommerce

In e-commerce, the use of SKUs enables better inventory management by providing a unique identifier for each product, which facilitates inventory tracking and replenishment. In addition, it helps improve the efficiency and accuracy of order processing by ensuring that products are uniquely and accurately identified in the seller’s and buyer’s records. This is especially important for online stores that handle large volumes of products and need to keep an accurate record of their inventory to avoid overstocking or out-of-stocks.

Tips on how to correctly create the SKU code

Some tips on how to correctly create the SKU code are:

A SKU code must be unique for each product, thus avoiding any confusion or error in product management and tracking.

The code should be easily readable and recognizable so that it can be used efficiently and accurately.

It is important to establish a coherent and consistent structure for SKU codes, using a combination of letters and SKU numbers that allows quick and clear identification of the product.

Consider including relevant information in the code, such as brand, model, color or size, so that the code clearly reflects the product’s characteristics.

It is important to maintain an up-to-date and accurate database of SKU codes, so that it is easy to access information on each product and maintain proper inventory management.

Main differences between SKU, UPC and EAN

SKU, UPC and EAN are product identification codes, but they have some key differences:

SKU

We have already explained in previous points what the SKU code is but, in short, it is a unique alphanumeric code that is used internally by companies to manage their inventory and product tracking. An example of an SKU code might be: TF12345. Unlike the UPC and EAN codes, the SKU is not an international standard and its structure may vary between companies.

UPC

UPC (Universal Product Code): is a numeric barcode used mainly in North America. The UPC consists of 12 digits and is used to identify products in physical and online stores.

EAN

EAN (European Article Number): is similar to the UPC but is mainly used in Europe and other countries. Unlike the UPC, the EAN consists of 13 digits.